What to watch on U.S. economy on Wednesday

Economists polled by MarketWatch expect ADP to report a 118,000 rise in private-sector payrolls November, down from 158,000 in October. November’s data is expected to be clouded by disruption from Hurricane Sandy, which economists at Goldman Sachs estimate may eliminate about 50,000 positions from payrolls.

Third-quarter U.S. productivity is expected to be revised up to a 2.8% increase from an initially reported 1.9%. The number rarely moves markets, but higher productivity suggests companies are still finding ways to reduce costs while producing more goods and services. The Labor Department reports the number at 8:30 Eastern.

Growth at U.S. service companies such as insurers and health providers likely slowed in November, according to the Institute for Supply Management’s monthly survey. The index is forecast to decline to 53.0% last month from 54.2% in October. Any number over 50 indicates expansion. The services index does not have the same stature as the ISM’s manufacturing gauge, which fell last month, but it usually tracks the performance of the broader U.S. economy. The index is released at 10 a.m. Eastern.

Factory orders probably fell 0.1% in October after a 4.8% surge in September. The Commerce Department will release the data at 10 a.m. Eastern.

Factory orders is the second report on manufacturing each month from the agency. We get an “advance” look first that focuses only on durable goods. Economists were pleased with this report released on November 27 even though orders were flat. This was not as bad as expected. In addition, core orders were modestly encouraging a pop of 1.7% after a drop of 0.4%.

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